The nation’s capital is an apropos location to discuss the impact of the Department of Labor’s final fiduciary rule, and the Investment Management Consultants Association plans to do just that beginning Monday.
The education and advocacy organization will host its “Focus on Fiduciary” event at Washington’s Willard InterContinental, and will feature Tim Hauser, Deputy Assistant Secretary for Program Operations of the Employee Benefits Security Administration with the DOL.
A survey of 401(k) advice among IMCA members for 401(k) Specialist executed earlier this year finds 41 percent of wealth managers derive at least 20 percent of their business from defined contribution plans.
Interestingly, a plurality of members (45 percent) see the recent DOL fiduciary action as an opportunity as a key opportunity to grow their businesses in the 401(k) market moving forward.
“More than half of IMCA’s advisor members serve as trusted consultants to institutions and 401(k) plans, helping provide suitable investments to employees to save for their financial futures,” said IMCA executive director and CEO Sean R. Walters, CAE. “Interestingly, while 401(k) advisory business will likely evolve as a result of the fiduciary rule, some IMCA members who responded to this survey see the pending legislation as having no impact on their business, and even representing an opportunity to increase their 401(k) business. I would expect to see more IMCA members – especially CIMA-certified professionals who are experts in selecting investment managers – serving 401(k) plans in the future.”
In addition to Hauser, a panel of three top advisors will offer their perspective on how they expect the DOL rule will impact their business, and a product impact session will focus on how the rule will impact the asset management industry, among other sessions.
“As an organization dedicated to education for investment advisors and wealth managers, we are pleased to provide this event along with additional resources to advance understanding of this historically important topic,” Walter added. “I encourage any financial professional whose business may evolve as a result of the new rule to utilize these resources.”
Below are highlights of the 401(k) survey:
1). What percentage of your business is 401(k) investing/advice?
Less than 10% 42.24%
10-20% 17.24%
20-40% 18.10%
60%+ 17.24%
Other 5.17%
2). How do you think potential fiduciary standard regulation will impact your 401(k) business?
Stop doing 401(k) business completely 5.17%
Slightly scale back 401(k) business 6.90%
Significantly scale back 401(k) business 4.31%
Change compensation structure 18.97%
No real change to my business 46.55%
Other 18.10%
3). When it comes to rollovers, are you capturing assets coming out of a 401(k) plan and into an IRA? If so, how much do you anticipate this will impact your business?
I plan to do more rollover business in 2016 21.05%
I plan to do about the same amount of business as before 52.63%
I plan to do less rollover business in 2016 11.40%
Other 14.91%
4). Where are the key opportunities in the 401(k) market for financial advisors in 2016?
Rollovers 20.69%
Increasing assets 24.14%
Enrollment rates 5.17%
Fiduciary rule 44.83%
Other 5.17%
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
